Receivable Sales Contract by ccl57121

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									                                                                 EXHIBIT 2
                                               Journal Entries: Sale of Inventory for €100,000


 Fair Value Hedge                                                       Cash Flow Hedge
 11/02/03                                                               11/02/03
 Accounts receivable – €                            115,840             Accounts receivable – €                            115,840
          Sales                                               115,840            Sales                                                115,840
 (1FV) sale of inventory for €100,000                                   (1CF) sale of inventory for €100,000

 12/31/03                                                               12/31/03
 Accounts receivable – €                             10,130             Accounts receivable – €                             10,130
          Foreign exchange gain – net income                   10,130   Foreign exchange gain – net income                             10,130
 (2FV) recognize FX gain on receivable                                  (2CF) recognize FX gain on receivable

 Forward contract loss – net income                  10,100             Forward contract loss –
         Forward contract                                      10,100   other comprehensive income                          10,100
 (3FV) recognize loss on forward contract                                       Forward contract                                       10,100
                                                                        (3CF) recognize loss on forward contract

 12/31/03                                                               12/31/03
                                                                        Forward contract loss – net income                   10,130
                                                                        Forward contract discount loss – net income              54
                                                                                 Reclassification adjustment – OCI                     10,184
                                                                        (4CF) reclass portion of FXFC loss to offset foreign
                                                                        exchange gain on receivable and amortized FXFC
                                                                        discount to net income

 Foreign exchange gain – net income                  10,130             Retained earnings                                        54
          Forward contract loss – net income                   10,100   Foreign exchange gain – net income                   10,130
          Retained earnings                                        30            Forward contract loss – net income                    10,130
 (4FV) closing entries                                                           Forward contract discount loss – net income               54
                                                                        Reclassification adjustment – OCI                    10,184
                                                                                 Forward contract loss – OCI                           10,100
                                                                                 Accumulated other comprehensive income                    84
                                                                        (5CF) closing entries

                                                                        01/30/04
 01/30/04                                                               Foreign exchange loss – net income                    1,410
 Foreign exchange loss – net income                   1,410                      Accounts receivable – €                                1,410
 Accounts receivable – €                                        1,410   (6CF) recognize FX loss on receivable
 (5FV) recognize FX loss on receivable
                                                                        Forward contract                                   1,300
 Forward contract                                     1,300                     Forward contract gain – other comp. income              1,300
         Forward contract gain – net income                     1,300   (7CF) recognize gain on forward contract
 (6FV) recognize gain on forward contract
                                                                        Reclassification adjustment – OCI                    1,384
                                                                        Forward contract discount loss – net income             26
                                                                                Forward contract gain – net income                      1,410
                                                                        (8CF) reclass portion of FXFC gain to offset foreign
                                                                        exchange gain on receivable and amortized FXFC
                                                                        discount to net income
 Cash                                               115,760
 Forward contract                                     8,800             Cash                                               115,760
         Accounts receivable – €                              124,560   Forward contract                                     8,800
 (7FV) settle receivable and forward contract net                               Accounts receivable – €                               124,560
                                                                        (9CF) settle receivable and forward contract net

 12/31/04                                                               12/31/04
 Retained earnings                                      110             Retained earnings                                       26
 Forward contract gain – net income                   1,300             Forward contract gain – net income                   1410
          Foreign exchange loss – net income                    1,410            Foreign exchange loss – net income                     1,410
 (8FV) closing entries                                                           Forward contract discount loss – net income               26
                                                                        Forward contract gain – OCI                          1,300
                                                                        Accumulated other comprehensive income                  84
                                                                                 Reclassification adjustment – OCI                      1,384
                                                                        (10CF) closing entries




32                                                                                                             APRIL 2005 / THE CPA JOURNAL

								
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